G.R. No. 235673, July 22, 2024
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, PETITIONER, VS. FELIX M. ERECE, JR., JANICE DAY E. ALEJANDRINO, MIRIAM M. PASETES, YOLANDA C. MORTEL, AND HENRY B. SALAZAR, RESPONDENTS.

FACTS

Petitioner Philippine National Construction Corporation (PNCC), originally named Construction Development Corporation of the Philippines (CDCP), was incorporated under the Corporation Code. After failing to pay loans, Government Financial Institutions (GFIs) converted their loans to equity shares in CDCP pursuant to a Letter of Instruction, making PNCC a government-acquired asset corporation. Respondents, who held executive and managerial positions at PNCC, were granted a monthly driver’s or fuel allowance pursuant to a 1996 Board Resolution. The Commission on Audit (COA) Resident Auditor, through Audit Observation Memoranda, found the allowance disallowable for being grossly disadvantageous and having no legal basis, as it was granted in addition to service vehicles. In September 2014, without a formal Notice of Disallowance from COA, PNCC stopped granting the allowance. Respondents filed a complaint with the Labor Arbiter for payment of the allowance, moral and exemplary damages, and attorney’s fees, arguing the allowance had ripened into company policy and its withdrawal violated the Labor Code’s non-diminution rule. PNCC contended it was a government-owned and controlled corporation (GOCC) subject to COA audit and that jurisdiction over the money claim lay with COA, not the Labor Arbiter. The Labor Arbiter ruled in favor of respondents. The National Labor Relations Commission (NLRC) reversed, dismissing the complaint for lack of jurisdiction, holding PNCC was a GOCC and jurisdiction was with COA. The Court of Appeals granted respondents’ petition, set aside the NLRC decision, and remanded the case to the NLRC, ruling that the Labor Arbiter had jurisdiction because PNCC was a GOCC without an original charter organized under the Corporation Code.

ISSUE

Whether the Labor Arbiter has jurisdiction over the respondents’ money claim for the withdrawn driver’s/fuel allowance.

RULING

No. The Supreme Court granted PNCC’s petition and reinstated the NLRC decision dismissing the complaint for lack of jurisdiction. The Court held that PNCC is a GOCC subject to the audit jurisdiction of the COA. Citing previous jurisprudence, the Court ruled that the grant of the subject allowance required approval by the President of the Philippines, as the governing body of PNCC is the President, pursuant to administrative orders. The allowance, being a form of compensation, is subject to the rules and regulations of the COA. Since the withdrawal of the allowance was based on COA’s audit findings declaring it disallowable, the claim for its payment is a money claim against the government. Under prevailing doctrine, such claims fall under the exclusive jurisdiction of the COA, not the Labor Arbiter. The Court emphasized that the constitutional power of the COA to audit government agencies, including GOCCs, is plenary, and its audit findings are binding. Therefore, the Labor Arbiter had no jurisdiction over the respondents’ complaint.